DALLAS (CN) – Beginning as eCarfly and branching out, three Texans and a Californian used five front companies to defraud people by selling millions of shares of unregistered penny stocks with false and misleading statements, the SEC says in Federal Court.
Jason W. Brola, 33, of Plano, Texas, and Ryan M. Reynolds, 37, of Dallas, “devised the scheme,” and brought in Desmond J. Milligan, 40, of Dallas, and Timothy T. Page, 58, of Malibu, to help them pull it off, the SEC says.
Brola operated through Tryst Capital Group, Page through Griffdom Enterprises and Testre LP, and Reynolds through Ballatalia, the SEC says.
The scam began in May 2006 as a plan to sell used cars over the Internet through defendant eCarfly, later known as Market 99, the SEC says. It claims the defendants raised money for their scheme through false and misleading press releases.
The defendants didn’t even have a license to sell used cars while they were pushing their stock, the SEC says, and they raised millions of dollars by increasingly outlandish claims, such as having patented technology for “ethanol co-fueling engines.”